Check Your Mirrors

MACK TRUCK, Volvo Group’s American subsidiary has rolled out an innovative diesel hybrid. The firm says its system can cut fuel consumption by up to 35%, using a traditional diesel engine; a Volvo I-Shift automated transmission; an electronic motor to generate some 160 hp electric power with energy storage and power train control systems. Canada’s Truck News reports that an agreement with the US Air Force has assisted the Volvo Group in demonstrating that its I-SAM (Integrated Starter Alternator Motor) hybrid setup is suitable for heavy trucks. Volvo Group president Leif Johansson told journalists that its U.S. subsidiary Mack Trucks has won four contracts from the US Air Force to develop hybrid-powered trucks, and further, says the firm plans to leverage that effort fully by producing civilian versions. Mack will build and test trucks though 2007 and 2008 and start production in 2009. Truck News quotes Johansson as stating that there is a big potential market for heavy-duty hybrids in North America and Europe with 20,000 refuse trucks; 80,000 construction vehicles; and 200,000 urban delivery vehicles that are already in operation. Not to mention the possibility of the system being successfully downsized for smaller trucks that are still much bigger than cars, like an SUV?

GAS will cost over 4$ a gallon in the U.S. by 2015, and over 5$ a gallon by 2020, according to auto company executives polled by the UMTRI (University of Michigan Transportation Research Institute).

CHERY, the Chinese partner of Damler-Chrysler will sell 29% more vehicles in China in 2007 than in 2006, according to their website. You’ll see Chery cars where you live soon enough, even if the badges on the cars say something else.

CARFAX has announced an agreement with AutoTrader.com, an online vehicle listing service, which will enable to AutoTrader.com to certify vehicles as “one-owner” vehicles, according to an article in Automotive News. Larry Gamache of CarFax commented that their consumer research shows that consumers are willing to pay an average of 15% more for vehicles that have had only one owner, based on the belief that the vehicle experienced better care during ownership by the same person. Gamache estimates that 50%-75% of the approximately three million vehicles on AutoTrader.com have the single-owner designation. Which, frankly, on the face of it, seems to be a statistical impossibility, but we’ll take his word for it. Also, it should be noted that some states note on the vehicle titles themselves how many times the vehicle has changed hands, generally by affixing a letter designation on the title. An example of this lettering sequence would be the original owner having an “A” title, the second owner of the same car having a “B” title, and so on. Very handy when you’re buying a used car in a private-party transaction and the guy selling it swears he’s the original owner, and then you see the title, and it’s a “D” title, and then you know that he is a prevaricator filled with avarice and greed. Just as an aside, I bought a project car once with a “T” title in Pennsylvania, one of the states that use the lettering system to track ownership changes. Now, that’s a lot of owners. By the time I sold it (completely restored), I was living in another state, so unfortunately the title could not earn another letter.

FORD is expanding capacity at its plant in St. Petersburg, Russia. Ford says it expects sales to grow 30% this year, which will put unit sales at 150,000. Ford is regarded as something of a premium brand in Russia (as it is in Mexico) and demand is very strong for the locally-produced Focus, which is driven by many of the 20-something and 30- something hipsters (and now their fans and wanna-bes) in the country.

CARNEGIE MELLON UNIVERSITY in Pittsburgh, PA, recently completed a traffic study for the AAA called Traffic STATS, which is detailed, searchable, and available as a PDF and a hard copy report. If you love data like I do, you’ll find lots of nuggets in here. Here’s an example: Men between the ages of 21 and 25 who drive motorcycles between the hours of midnight and 4 AM have a fatality rate that is 45,000 times higher than average. Wow. Those are staggeringly bad odds if you’re a guy that drives a motorcycle home from your job on the evening shift. Of course, lots of other data points in the huge study; elderly driver data, geographic data, time-of-day data, gender-driven data, etc.

TOYOTA is expected to pass General Motors in total volume of vehicles sold in 2007 and then become the world’s largest vehicle manufacturer, but GM is vowing to do whatever it can to hold on the No.1 designation. GM says it is not going to offer rebates or discounts just to keep the biggest automaker title, but it will do everything it can to sell as many vehicles as possible in every region of the world in order to fend of Toyota. GM president Rick Wagoner says that GM has plenty of room for growth on a world-wide basis, and that the company is not going to give up the sales crown without a fight. GM’s sales worldwide dropped by 1% in 2006, but that was mostly due to the elimination of auto sales to rental fleets in the U.S., a practice GM said was unprofitable. Mighty Toyota, meanwhile, demurs when asked about being No.1, officially stating that it’s not something that is a goal to the company. Yeah, that sounds about right. It’s probably never even mentioned at the company meetings.

LATVIA is the fastest-growing new car market in the EU, according to JATO Dynamics, one of the largest auto data firms in the world. Latvia showed in increase in new car sales of 51.8% from 2005 to 2006. That is 16,857 vehicles in 2005 compared to 25,582 in 2006.

DAIMLERCHRYSLER has taken the wraps off its new Mercedes-Benz C-Class, and it looks like they have a winner on their hands. This from the official company press release: “The new C-Class is larger in virtually every dimension over its predecessor. Interior space has increased in the areas of rear legroom, front and rear hip room as well as front and rear shoulder room”. And some more words from the company: “The design of the new C-Class is based on the modern Mercedes idiom, which reflects the technical superiority of automobiles bearing the star with taut lines and large, tranquil surfaces. The pronounced wedge-shape of the front end serves to emphasize attributes such as agility and performance.” Well, it does look pretty nice. The technical specifications are pretty swell, too. If they have effectively banished the quality gremlins that haunted them until a couple of years ago, they’re going to shift a great many of the new C-Class.

EVER wonder just how many “certified” used cars go across the blacktop every month? You do? Jeez, I thought it was just me. You say you also wonder how it breaks out by manufacturer? Here are some selected figures: Autodata Corp. says that Ford (includes Lincoln, Mercury, Volvo, Jaguar, Land Rover) sold 13,275 certified vehicles last month (Dec. ’06). Bentley sold 27, Porsche sold 461, Toyota (includes Lexus) sold 26,700, and General Motors (includes all brands, including Saab) sold 41,800. Suzuki sold 2 and Hyundai sold 5. Nissan sold 4,506 and much-smaller BMW sold quite a bit more at 5,901.

PEUGEOT has announced that they are going to try selling used Peugeots over the internet in the EU. Peugeot’s press release stressed that the company is not interested in selling new cars over the internet or via any retail method, in a pre-emptive effort to head off what is sure to be some measure of sound and fury from the Peugeot dealer network. Some of our readers may recall that Jac Nassar toyed with the idea of factory dealerships when he was CEO of Ford, and the Ford dealer base went ber-serk. That, in turn, was one of the things that got Jac his walking papers at Ford, and, furthermore, prompted auto dealers in the United States to subsequently press their state lawmakers to erect onerous regulatory hurdles around what legally constitutes an auto dealer. The current regulatory environment ensures that there will never be direct sales of automobiles to consumers from any factory or through big-box retailers (think big-screen televisions, washing machines, computers, etc.), as the auto dealers have used the laws that they themselves helped write to make sure that they will always be around.

SAAB says it is going to use “surgical” marketing to heal itself in the U.S. I bet that was at least a 30-page PowerPoint deck at the monthly executive meeting at Saab. Saab needs some fresh product in the States, and not a re-branded version of a Chevrolet SUV, either.

SMART has started recruiting dealers in the United States in earnest and expects to have 50-60 dealers when it starts selling cars next year. A Smart franchise requires about a $300,000 investment on behalf of the potential dealer; and it also reguires separate showroom space for the franchise. Smart says that it expects the average franchise to make a net profit in the first 12-24 months and to sell over 200 vehicles in the first year. The company expects to get their first dealers up and running in the metro areas along the Eastern, Gulf and Western Coasts of the U.S.

Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.